Monday, October 21, 2013

District court finds settlement stipulated underground pipeline is the sole use for a property

On October 11, 2013, the United States District Court for the Middle District of Pennsylvania denied a gas pipeline company’s Motion to Enforce Settlement Stipulation and Order because the clear and unambiguous language of an earlier settlement order limits the gas pipeline company’s use of land solely for a natural gas pipeline. Tennessee Gas Pipeline Co., L.L.C. v. Permanent Easement, 2013 WL 5603595 (M.D. Pa. Oct. 11, 2013).

In 2012, Tennessee Gas commenced the action at hand by filing a complaint to condemn a parcel of property in Pike County, PA. After several months of litigation, the parties agreed to a settlement that stipulated the landowners agreed to deliver to the gas company a deed conveying a portion of their land, including rights of way, along with a written confirmation of subdivision approval by a “federal master.” On February 26, 2013, the federal master sent the parties a letter requiring their signatures on a “Request for Planning Waiver and Non-Building Declaration” that was attached. The request provided a written description of the disputed parcel of land and its intended use: “the sole purpose of the ‘out parcel’ is for the installation of the underground gas pipeline.” Tennessee disputed this language and asked that the intended use be revised for “facilities” or “construction.” The federal master rejected these changes. Tennessee then, on April 9, requested the description be changed to reflect “current” intended use, which it argued could change subject to approval because it held the parcel in fee simple. The federal master again rejected the changes, and Tennessee filed the instant motion.

The court found against Tennessee and denied its motion to enforce the settlement because the relief requested by the gas company (requiring signing and approval of the revised request) contradicted the clear and unambiguous terms of the settlement agreement. The court explained the settlement provision specifically limited the land use solely to an underground natural gas pipeline because the settlement provision’s language stated the land was to be used “strictly and solely for use of a natural gas transmission pipeline.” Further, the deed restricted use of the land because it incorporated the provisions of the settlement agreement. Therefore, the gas company’s motion was denied.

Written by: Garrett Lent, Research Assistant
Agricultural Law Resource and Reference Center
October 2013

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